The Textile Ministry in India has sought more benefits for the weaving sector under the revised Technology Upgradation Fund Scheme (TUFS). While the spinning sector incentives are to be reduced. The thinking is that while the spinning sector has improved over the years and weaving is the one which requires attention.  The weaving sector is expected to get 6 per cent interest rate subvention, which right now stands at 5 per cent. It may be noted that TUFS that was very popular in the textile industry just a few years ago, is being restructured and will be part of the next five year plan. The scheme is also trying to increase credit flow to the power loom and processing sectors. 

The scheme, introduced in 1999, benefited projects involving investments worth Rs 2,08,000crores. After the first allocation of about Rs 11,200 crores, a second tranche of Rs 1,972 crores was allocated for 2011-12 by the Ministry of Textiles. However, it drew poor response, leading to disbursal of just 13 per cent, or Rs 256 crores, during the financial year. The government then extended the scheme for another year, without allocating extra funds, on the expectation companies would invest aggressively. However, the scheme again drew a poor response. 

In the last two years, textile companies have slowed down their expansion plans due to economic uncertainties in major economies, who are major importers of Indian textiles.